The Australian Energy Regulator (AER) has received proposals from the five Victorian electricity distributors for charges to apply to smart meters in 2015. The AER is responsible for insuring that the metering service charges of each Victorian distributor allow for recovery from retailers of actual rollout expenditure which is within ‘scope‘ and ‘prudent‘.
The original Cost Recovery Order in Council, which set up the frame work for distributors to recover advanced metering infrastructure (AMI) costs from retailers, was gazetted on 28 August 2007, and subsequently amended in further Orders in Council (OIC). A ‘cost through’ model applies, under which budgets for the rollout are established at the beginning of each period and then annual charges are adjusted based on actual expenditure. The current proposals from the five Victorian electricity distributors relate to revised charges for AMI services for the year commencing 1 January 2015. The original budget for these charges was set by the AER in its Final Determination, Victorian Advanced Metering Infrastructure Review 2012–15 budget and charges applications.
Recoverable expenses, which are reputed to amount to 2.3 billion dollars for the program and are ultimately paid for by consumers, include a return on capital (as determined by the AER), depreciation, maintenance and operating expenditure. This means that all the AMI costs of the rollout, from the cost of smart meters and installation of smart meters through to the costs of AMI communications infrastructure and AMI Information Technology systems, providing expenditure reasonably reflects ‘efficient costs‘, are recoverable by the power distributors. The distributors’ current applications seek to recover charges which are in excess of their regulatory budgets for 2015 by demonstrating that these additional costs are both ‘in scope’ and ‘prudent’.
Four of the five power distributors, being Jemena, United Energy, CitiPower and Powercor, pursuant to the Order in Council gazetted on 5 August 2014, propose to apply manual meter reading fees to some customers. According to the amendments in this Order in Council, manual meter reading fees, commencing 1 April 2015, are directly payable by the customer to the distributor where an account holder has refused a smart meter and also where there is an inability to install a smart meter due to a defect (and the customer does not hold a Pensioner Concession card or specified Health Care or Department of Veterans’ Affairs Gold card). If the retailer has agreed, the manual reading fee will alternatively be paid by the retailer to the power distributor.
The AER is inviting submissions on the power distributors’ proposed fees until 30 September 2014. Details of the invitation and the Victorian power distributors’ applications can be accessed here: AER Invitation
Relevant background material can be found here: Relevant background material-1
Comparison of proposed 2015 annual AMI charges and actual 2014 AMI charges
Service charge 2015 manual meter read fee
(Single phase smart meter)
2015 2014 (Ex GST)
Jemena $231.28 ($193.82*) $10.83 per read ($2015)
United Energy $160.44 ($141.33) $11.05* per read ($2014 ex GST)
AusNet Services $208.87 ($160.21) No manual read fee
Powercor $108.96 ($115.27**) $31.07 per read ($2014 ex GST)
CitiPower $115.49 ($116.55***) $19.44 per read ($2014 ex GST)
Note: Jemena, United Energy and AusNet Services’ 2015 service charge is expressed in nominal dollars, whereas Powercor and CitiPower’s service charge is expressed in 2014 dollars.* $12.28 ($2014 ex GST) for interval meter.
* Sourced from Jemena’s Schedule of Service Charges.
** Sourced from Powercor’s 2014 General Service Charge Pricing Schedule.
*** Sourced from CitiPower’s 2014 General Service Charge Pricing Schedule.